Maybe you thought you’d heard it all when it comes to people camping out overnight to get a shot at being the first to own perhaps the hot toy or the latest computer game.

But how about a home mortgage?

Twenty-five home buyers with signed purchase agreements — some of them having waited as long as 24 hours — were in line early Saturday outside the new Liberty Bank branch in Wethersfield for a chance at applying for a 30-year, fixed-rate mortgage at an incredibly low rate of 3.5 percent.

“It’s like winning the lottery,” said Mike Lemos, who was fifth in line Saturday at the Silas Deane Highway branch.

Lemos and his wife, Julie, a real estate agent, were among the 13 who were lucky enough to get a shot at a slice of the $3.5 million program. The remaining dozen were put on a waiting list in case others before them in line don’t get final approval.

The Lemoses hope that the low rate will allow them to afford payments on a $360,000 ranch that’s nearly double the size of their current 1,800-square-foot colonial — and save $100,000 over the term of the mortgage.

“We wouldn’t have had a thought of doing this without this rate,” said Lemos, a securities compliance director at MetLife.

The promotion — intended to call attention to the opening of Liberty’s first branch in Wethersfield — allowed purchases of one- to four-family homes in Wethersfield. Borrowers had to come armed with a signed purchase contract. No points were charged, but closing costs and other fees still applied.

At a time when most lenders are scrutinizing credit and income histories amid the downturn in the housing market and fallout from the subprime lending crisis, the promotion gave borrowers a low rate to help counterbalance lending industry insistence on higher down payments after years of loose underwriting.

A little math reveals the savings for borrowers. On a single-family house in Wethersfield purchased at July’s median sale price of $252,000 with a 20 percent down payment, a borrower would finance $201,600. The monthly principal and interest payment at 5.93 percent — the national average last week for 30-year, fixed-rate home loans — would be $1,200. At 3.5 percent, the payment drops to $905 — a difference of $294 a month, or $105,973 over 30 years.

If the borrowers — many of them pre-qualified, based on credit scores and income — receive final loan approval, they also have to open a checking account with direct payroll deposit and automatic debit for the monthly mortgage payment.

The prospect of sizable savings grabbed the attention of Nancy and Douglas Robertson of New Britain, who were 11th in line. The couple had been house-hunting in the Hartford area, but quickly settled on Wethersfield when they heard about the promotion from their real estate agent two weeks ago. They signed a contract on a $365,000 four-bedroom, 2 1/2 bath split-level near the Rocky Hill line on Labor Day. The Robertsons estimate that they will save between $500 and $600 a month on their monthly payments with the low rate.

Nancy Robertson, a lawyer, said she enjoyed the camaraderie in line, although she could have done without such a long wait.

“But it’s a small price to pay for a once-in-a-lifetime rate on a mortgage,” she said.

Even when 30-year rates were at their lowest, on average, nationally, in June 2003 — at 5.23 percent with 0.6 point — it was well above what Liberty was offering in the program.

The bank took the opportunity to woo those waiting in line. It handed out umbrellas during a downpour Friday night, and later served pizza. Unlike similar campouts at retailers, Liberty brought in a portable toilet, complete with flashlight.

Banks typically trot out promotions when they open new branches in a market as they dig in to build market share. But the promotions are usually aimed at savings, such as high-rate certificates of deposit. But Liberty wanted to do something with loans. The bank chose $3.5 million and 3.5 percent because the branch is Liberty’s 35th.

Robert A. Steele, the bank’s director of consumer credit risk, said the bank expects to “break even” on the loans. But the greater benefit is exposure to the community — and showing the market that the bank has money to lend, even in a tighter market for credit.

Anthony Centurelli, who secured the first place in line, wants out of his condo and saw the rate as the way.

He has a hard time parking his pickup truck in his complex. The $280,000 house he and his wife hope to buy on Folly Brook Road has two garages.

“This came up, and we said, ‘What the heck?'” said Centurelli, a civil engineer.

Well, one thing is for sure — a few lucky families in Wethersfield, Connecticut probably won’t be refinancing over the next 30 years…

4 COMMENTS

Hey…we were #6 out of the 13 people who originally were offered…it was a tense day and a crazy night, but obviously worth it…and you are right…we will probably never move out of this house unless we win the lottery (or eventually when the house is paid off).

I had an encounter with Liberty Bank that I believe to have been illegal, and was certainly immoral.

About 2 weeks before September 13, Liberty Bank began an add campaign for a 3.5%
interest rate 30 year fixed mortgage. This was offer was available for houses being
purchased in Wethersfield, at their new branch at 171 Silas Deane Highway. They would
provide $3.5 million for these mortgages on Saturday, September 13th.

On Wednesday, September 10, I called Liberty’s branch at 171 Silas Deane Highway, and
spoke with their loan officer, Deborah K. Miller (Office: 860-613-3710 Email:dmiller@liberty-bank.com) to ask about this mortgage, and the logistics to apply for it.

I specifically asked her about standing in line to wait for the mortgage, and asked if I
could arrive at 8:00 AM on Friday, September 12th, to be certain that I would arrive early
enough be able to get a mortgage in this offer. Ms. Miller told me, “No. We will not allow
anyone to arrive and line up before 7:00 PM on September 12th. We will have police here,
and they will be instructed to remove anyone that arrives before 7:00 PM. Don’t come down
before 7:00 PM.”

As instructed by Ms. Miller, the LEAD authorized agent of Liberty Bank, I arrived at Liberty
Bank at 7:00 PM on September 12th.

There were already 19 people in line at this time, in the next parking lot to the south of
Liberty Bank. Ms. Miller and several other bank employees instructed me to park in that
lot, and wait in the line already formed there. This lot belongs to Century 21.

I found out from the others already in line that they had lined up starting at 7:00 AM
(NOT PM) that morning. No one told them to leave. Had I arrived at 8:00 AM, as I had
planned, I would have been second or third in line. Because I followed Ms. Millers’
instructions, I was now 20th in line.

At 8:00 PM, Ms. Miller and the other bank employees instructed the line that they could
now line up at the door of the branch, and helped everyone move, in order, from the parking
lot next door, over to the door of the bank.

I, and other people at the rear of the line asked Ms. Miller and some of the other bank
employees if it was worthwhile to wait in line, as there were so many people, and such a
limited amount of money. They all smiled, and said, “I wouldn’t leave if I were you – You
won’t be disappointed!” Based on this assurance, we all then waited in line overnight for
11 hours. During this time, I found that the others at the rear of the line with me had also
been instructed by Ms. Miller NOT to arrive before 7:00 PM.

Liberty Bank took all our information, and then informed those of us at the rear of the
line that they would get back to us – And again, I was told that I would not be disappointed.

Well Liberty did get back to me. They emailed me an offer for a loan at 5.75%, the current going
rate, not 3.5%. Well – I was very, VERY disappointed. I already had 5.75 from Norcom Mortgage.
I came to Liberty bank exclusively for the 3.5% rate.

Liberty Bank told me that no one would be allowed arrive and to line up until 7:00 PM, but then
allowed, recognized, and used the line that they instructed to form beginning, at 7:00 AM. No
matter how much they claim that they did not authorize, recognize, and use this line, they still
did.

And I believe that their telling me to stay, taking my information, and then offering a much higher
rate is bait and switch, and is illegal.

Of the roughly 11 mortgages that Liberty issued at that 3.5% rate, 5 of these were to houses
sold by Century 21 agents. These people were in line in front of everyone else. They
weren’t told not to come till 7:00 PM. This seems unethical at the very best.

It appears to be more than a coincidence that that many people with Century 21 agents would
not have been weeded out by being told NOT come until 7:00 PM, when so many other
people who did not have Century 21 agents WERE told not to come till 7:00 PM.